Valencia seeks over 4.5bn euros from Spain government

Spain's eastern Valencia region has announced it will seek a rescue of more than 4.5 billion euros ($5.6 billion) from the central government as the fourth-largest economy in the eurozone scrambles to confront a debt repayment crunch and bailout threat.
"Yes, I confirm the figure," AFP quoted a spokesman for the region as saying on condition of anonymity.
The spokesman added that the regional president, Alberto Fabra, initially gave the figure while visiting a factory in the Valencian city of Castellon.
Valencia’s debt amounted to more than 20 billion euros at the end of 2011, which corresponded to about 20 percent of its entire economic output.
The region faces debt repayments of 2.88 billion euros in the second half of 2012. It had estimated its needs at 3.5 billion euros; however, Fabra added "more than a billion" euros to cover monies owed by the region to municipalities.
The Thursday request comes two days after northeastern Catalonia region said it would ask for 5.0 billion euros. Analysts expect more demands to roll in from Spain’s regions.
Spain is engulfed in recession with a jobless rate of nearly 25 percent, and is going through crippling market interest rates.
Meanwhile, Prime Minister Mariano Rajoy is seeking support from visiting French President Francois Hollande.
On Tuesday, he secured support from European Union president Herman Van Rompuy, who lauded Spain’s "very bold, courageous and ambitious" austerity program.
The next step for Rajoy will be to win over German Chancellor Angela Merkel, who will visit Madrid on September 6.
Spain aims to find 102 billion euros in budget cuts and tax increases by 2014 so as to lower the public deficit from a blowout figure of 8.9 percent of economic output last year to 2.8 percent.
MP/JR